Microsoft is using its patent portfolio to squeeze royalties from manufacturers who install Android on their mobile devices, according to a new legal filing from Barnes & Noble.
The bookseller's counterclaim to a Microsoft lawsuit, filed April 25 with the U.S. District Court for the Western District of Washington at Seattle, details a July 2010 meeting in which Microsoft's counsel allegedly demanded an "exorbitant royalty" for a patent license for Barnes & Noble's Nook Color, with "an even higher per device royalty for any device that acted -more like a computer' as opposed to an eReader."
The Nook Color relies on the same Android operating system that currently powers a variety of smartphones and tablets. The filing describes Microsoft as repeatedly arguing that its patent portfolio would "entirely preclude the use of Android Operating System by the Nook," and mentions that both HTC and Amazon have entered into patent-licensing deals with Redmond.
"Microsoft is misusing these patents as part of a scheme to try to eliminate or marginalize the competition to its own Windows Phone 7 mobile device operating system posed by the open source Android operating system and other open source operating systems," it reads at one point. "Microsoft's conduct directly harms both competition for and consumers of eReaders, smartphones, tablet computers and other mobile electronic devices, and renders Microsoft's patents unenforceable."
Barnes & Noble also calls into question Microsoft's recent deal with Nokia to port Windows Phone 7 onto the latter's hardware.
"Microsoft and Nokia discussed and apparently agreed upon a strategy for coordinated use of their patents," the filing adds. "This type of horizontal agreement between holders of significant patent portfolios is per se illegal under the antitrust laws, threatens competition for mobile device operating systems and is further evidence of Microsoft's efforts to dominate and control Android and other open source operating systems."
Just to get its point across, Barnes & Noble raises the anticompetitive specter elsewhere in the filing.
"Microsoft's activities have a significant, wide felt, and highly detrimental anticompetitive effect and restrain competition in the market for mobile operating systems," it mentions at one point, "by suppressing the use and development of open source mobile operating systems, including the Android operating system, and the development of applications and devices employing the same."
The terms "anticompetitive" and "antitrust" are generally regarded as sore points for Microsoft, which spent a significant chunk of the 1990s embroiled in a monopoly dispute with the U.S. Department of Justice. That case forced Microsoft to make significant concessions.
In its original legal action, filed March 21, Microsoft insisted that the Nook violates its intellectual property.
"The Android platform infringes a number of Microsoft's patents, and companies manufacturing and shipping Android devices must respect our intellectual property rights," Horacio Gutierrez, Microsoft's corporate vice president and deputy general counsel for intellectual property and licensing, wrote in a March 21 statement. "To facilitate that, we have established an industry-wide patent licensing program for Android device manufacturers."
While Microsoft has fired off patent lawsuits over Android before, they have been generally aimed at smartphone manufacturers. In April 2010, HTC announced that it had agreed to pay Microsoft royalties in exchange for the use of "patented technology" in its Android-powered phones. In the wake of that agreement, rumors circulated that Microsoft was negotiating intellectual property agreements with other unnamed manufacturers over Android smartphones.
In October 2010, Microsoft sued Motorola for allegedly violating nine patents with its Android smartphones. "The patents at issue relate to a range of functionality embodied in Motorola's Android smartphone devices that are essential to the smartphone experience," Gutierrez wrote in an Oct. 1 statement. Motorola later retaliated with an intellectual-property complaint of its own.
The Android lawsuits suggest that Microsoft is taking its traditionally aggressive stance with regard to patents and open source. Android relies on a Linux kernel for core system services such as security, memory and process management, and network stack.
During an October 2007 meeting of Web 2.0 developers and partners in London, Linux Watch quoted Microsoft CEO Steve Ballmer as saying, "I think it is important that the open-source products also have an obligation to participate in the same way in the intellectual property regime." In the interim years, other Microsoft executives have reiterated both the company's extensive intellectual property portfolio and its willingness to do whatever necessary to defend against perceived infringement.